Friday, July 18, 2008

Lessons in Love, by Way of Economics

As my fine professor of economics at Columbia, C. Lowell Harriss (who just celebrated his 96th birthday) used to tell us, economics is the study of the allocation of scarce goods and services. What could be scarcer or more precious than love? It is rare, hard to come by and often fragile.

My primary life study has been about love. Second comes economics, so here, in the form of a few rules, is a little amalgam of the two fields: the economics of love.

In general, and with rare exceptions, the returns in love situations are roughly proportional to the amount of time and devotion invested. The amount of love you get from an investment in love is correlated, if only roughly, to the amount of yourself you invest in the relationship. If you invest caring, patience and unselfishness, you get those things back. (This assumes, of course, that you are having a relationship with someone who loves you, and not a one-sided love affair with someone who isn’t interested.)

Research pays off. The most appealing and seductive (that word again) exterior can hide the most danger and chance of loss.... It is a rare man or woman who can resist the outward and the surface. But exteriors can hide far too much.

In every long-term romantic situation, returns are greater when there is a monopoly. If you have to share your love with others, if you have to compete even after a brief while with others, forget the whole thing. You want to have monopoly bonds with your long-term lover.

The returns on your investment should at least equal the cost of the investment. If you are getting less back than you put in over a considerable period of time, back off.

Long-term investment pays off. The impatient day player will fare poorly without inside information or market-controlling power. He or she will have a few good days but years of agony in the world of love. To coin a phrase: Fall in love in haste, repent at leisure.

Realistic expectations are everything. If you have unrealistic expectations, they will rarely be met. If you think that you can go from nowhere to having someone wonderful in love with you, you are probably wrong. You need expectations that match reality before you can make some progress. There may be exceptions, but they are rare.

Have a dog or many dogs or cats in your life. These are your anchors to windward and your unfailing source of love. Ben Franklin summed it up well. In times of stress, the three best things to have are an old dog, an old wife and ready money. How right he was.

THERE is more that could be said about the economics of love, but these thoughts may divert you while you are thinking about your future.

And let me close with another thought. I am far from glib about the economy. It has a lot of pitfalls facing it. As workers and investors, we know that many dangers lurk in our paths. But so far, these things have always worked themselves out and this one will, too. In the meantime, they say that falling in love is wonderful, and that the best is falling in love with what you have.